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ASIA-MARKETS-UPDATE
Asian markets follow Wall St plunge following weak US data
HONG KONG, Oct 2, 2019 (BSS/AFP) – Asian markets sank Wednesday following
a worse-than-expected reading of US factory activity that revived worries
about the impact of the trade war on the global economy.
Adding to the selling pressure in Hong Kong were long-running concerns
about the impact of increasingly violent pro-democracy protests in the city
that saw a demonstrator shot and wounded by police on Tuesday.
Regional investors took their lead from Wall Street, where equities tanked
in response to news that an index of US manufacturing activity fell last
month to its lowest point since June 2009.
The data pointed to the impact of the China-US trade war on the world’s
top economy and will likely put pressure on Donald Trump to push through an
agreement. Top-level talks are planned for this month.
Manufacturing is “thought to be the specific chunk of the economy the
president must… protect and the sector the US aggressive trade policies
were supposed to enhance”, said Stephen Innes, Asia-Pacific market analyst at
AxiTrader.
“So, the data could also imply not only monetary policy infusion is on the
way but could increase the odds of some type of trade war detente.”
The figures combined with a weak eurozone inflation reading and a
contraction in Britain’s economy in the second quarter.
Tokyo ended 0.5 percent lower, Sydney fell 1.5 percent and Singapore lost
1.2 percent, with Manila also off more than one percent. Taipei, Wellington,
Bangkok and Jakarta were also lower.
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Seoul shed almost two percent after North Korea fired a missile into the
sea just a day after Pyongyang said it would resume stalled nuclear talks
this week.
“Looking at the broader picture, it is fair to say that the worldwide
manufacturing sector is in trouble,” said David Madden, market analyst at CMC
Markets. “The US-China trade spat is having a knock-on effect around the
globe.”
Hong Kong fell 0.2 percent — though it pared earlier steep losses — as
investors returned from a public holiday to mark China’s National Day but
which saw some of the worst violence in the city since protests began in
June.
MORE/HR/1500
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
A teenager was shot in the chest by a policeman, fuelling fears of a
worsening of the unrest that has crippled the city’s economy.
Shanghai was closed for a holiday.
On currency markets the dollar inched back after dropping Tuesday
following the US factory data, which led to speculation the Federal Reserve
will cut interest rates again this month.
It pushed on against the pound as Prime Minister Boris Johnson prepares to
submit his final offer for a new Brexit deal later in the day, warning that
if the EU turns it down Britain would leave the bloc this month with no
divorce deal.
Dealers are also awaiting the release Friday of US jobs data, which could
give an idea about the Fed’s rate plans, while the corporate earning season
is also about to get underway.
“For the month of October I think we are going to continue to see there is
no shortage of headwinds for what is going on in the environment in terms of
risk to economic growth and global growth,” Terri Spath, chief investment
officer at Sierra Investment Management, told Bloomberg TV. “There will be a
lot more attention paid to that.”
In early European trade London, Paris and Frankfurt all fell more than one
percent.
– Key figures around 0810 GMT –
Tokyo – Nikkei 225: DOWN 0.5 percent at 21,778.61 (close)
Hong Kong – Hang Seng: DOWN 0.2 percent at 26,042.69 (close)
Shanghai – Composite: Closed for a public holiday
London – FTSE 100: DOWN 1.2 percent at 7,275.29
Euro/dollar: UP at $1.0929 from $1.0935 at 2045 GMT
Pound/dollar: DOWN at $1.2271 from $1.2300
Dollar/yen: UP at 107.71 yen from 107.69 yen
West Texas Intermediate: UP 38 cents at $54.00 per barrel
Brent North Sea crude: UP 13 cents at $59.02 per barrel
New York – Dow: DOWN 1.3 percent at 26,573.04 (close)
BSS/AFP/HR/1500